Gold drops to near US$4,000 on hot inflation, tech stock sell-off

[SINGAPORE] Gold fell to near US$4,000 an ounce – on track for a second monthly loss – as rising oil prices added to inflationary pressure and a tech stock sell-off raised the risk of investors selling the metal to cover losses.

Bullion dropped as much as 0.6 per cent after shedding almost twice that in the previous session.

The US Federal Reserve left the door open for an interest rate hike before the end of 2026, and data released on Thursday (Oct 29) showed a 0.5 per cent rise in the US personal consumption expenditures price index in September.

That is the most since March for the central bank’s preferred inflation gauge.

The precious metal has declined almost 4 per cent in October as concerns around renewed fighting in the Middle East keep energy prices elevated.

Oil surged on signs that the US may resume military strikes against Iran after next week’s midterm elections.

Gold also remains vulnerable to broader equity liquidations. Technology shares led a global stock sell-off for a second session after another round of disappointing earnings fuelled a rotation out of the artificial intelligence trade.

That followed an AI-led stocks rout last week that helped drag bullion to the lowest since July.

Since then, gold has wavered near US$4,000 an ounce, finding some support from Chinese households and long-term investors buying the dip.

SEE ALSO

Gold looks to greenback for next direction

Gold liquidity deep enough for Asian, Western hubs to coexist, Hong Kong and Singapore say

Strategic case for precious metals

Bullion is still “holding well”, said Ole Sloth Hansen, head of commodity strategy at Saxo Bank, with traders watching “to see whether the after-hours sell-off extends into today’s Wall Street session, potentially triggering broader de-leveraging and liquidity-driven selling across markets”.

Meanwhile, silver slid as much as 2 per cent to near US$51 an ounce, and was down about 15 per cent so far in October. The metal has erased all of its gains since early December, when it began a dramatic two-month rally to a peak above US$120 an ounce.

“Despite silver moving into oversold territory, the risk of further long liquidation and momentum-driven selling from technically focused funds remains,” Hansen said, adding that this could open the door to a move towards the mid-US$40s an ounce.

The gold-silver ratio has climbed to the highest since December, meaning it now takes more ounces of silver to buy the same measure of gold.

“The divergence underscores silver’s continued vulnerability relative to gold, which continues to attract demand from investors less sensitive to interest rate developments,” Hansen said.

Spot gold fell 0.5 per cent to US$4,003.44 an ounce at 10.42 am in Singapore. Silver slid 1.3 per cent to US$51.47 an ounce.

Platinum and palladium also declined. The Bloomberg Dollar Spot Index, a gauge of the US currency, slipped 0.2 per cent. BLOOMBERG